Heterogeneous Beliefs in a Sticky-Price Foreign Exchange Model
Heterogeneous Beliefs in a Sticky-Price Foreign Exchange Model
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By Mikael Bask and Carina Selander
Heterogeneous Beliefs in a Sticky-Price Foreign Exchange Model
It is demonstrated in this paper that the exchange rate "overshoots the overshooting equilibrium" when chartists are introduced into a sticky-price monetary model due originally to Dornbusch (1976). model.
Mikael Bask and Carina Selander